The federal and Ontario governments say they are keeping the door open to Chrysler Group CEO Sergio Marchionne to resume negotiations for government funding for a multibillion-dollar investment at its plants in Windsor and Brampton, but at least one industry observer thinks that possibility is dead in the water.

“The demands from government are onerous,” said Dennis DesRosiers, a Toronto-based analyst. “If you go the government route it would take a year to 18 months just to get a deal done” – a process that would delay Chrysler’s efforts to launch the next generation minivan and updated versions of the Brampton-built sedans.

According to a Globe and Mail newspaper report Thursday, Marchionne walked away from the talks after the two levels of government asked how much of its proposed $3.6-billion investment would be spent in Ontario. The governments sent Chrysler a joint letter and term sheets that offered to put up money as a percentage of the investment the automaker would be spending in Ontario, according to the Globe. Apparently, Marchionne balked at those terms, the Globe said.

A source familiar with the situation said companies seeking government partnerships can expect a lengthy wait. “It’s not surprising that government would always seek commitments to ensure there is an agreement that is in the best interests of taxpayers and the auto industry,” the source said. “There is a lot back and forth. This isn’t your government grant where you put in an application.

“There is a due diligence process undertaken by a third party. It’s not simplistic, not short. And I want to stress, this is normal to seek these assurances. It shows government is being diligent in how it uses taxpayers’ money.”

A source who was involved with the negotiations that led to Ford’s announcement last year of a $700-million upgrade at its Oakville plant said it took two years to seal that deal, which included at $142-milion contribution from Ottawa and Queen’s Park. “It’s the nature of dealing with government.”

DesRosiers said if Marchionne wants to start selling the next generation minivan in 2016, retooling would have to begin this year. “Marchionne needs the product now.”

It’s not the first time the automaker has pulled a government loan request. In 2012, Chrysler withdrew its application for a $3.5 billion low-interest loan from the U.S. Department of Energy to be used to fund research and tooling for more fuel-efficient vehicles.

“The DOE’s proposed terms were very restrictive and compliance would have negatively affected our operational flexibility,” a Chrysler spokeswoman said at the time.

Marchionne announced Tuesday he was withdrawing his request for government financial assistance, in part because it was being used as a political football in a growing debate that saw critics denouncing money for Chrysler as corporate welfare. Instead, the automaker said it would retool the Windsor Assembly Plant and update its sedans at Brampton with its own money.

At the Geneva Auto Show Wednesday, Marchionne said he wanted to avoid political interference. But he would not disclose the size of the investment. “How much money we commit is not up for public scrutiny and I don’t want politicians screwing around with our capital expenditure,” said Marchionne.

Conservative MP Jeff Watson said the government has a duty to determine what percentage of an automaker’s investment is going to be spent in the Canada for such things as research and development and jobs. “We want a certain amount of guarantees of Canadian content in production and the supply chain.”

But Chrysler was not “forthcoming” in providing that information, said Watson.

Jerry Dias, Unifor national president, was still holding out hope that Chrysler would return to the negotiating table and proceed with a $2.3-billion investment that would turn the minivan plant into a state-of-the art plant with a flexible global platform capable of producing a variety of vehicles. “I’m trying to instill a calmness into this thing,” said Dias. “I want to get all the stakeholders back to the table and I want to get the damn thing done. Ontario needs these investments.”

Dias said he had a 30-minute conversation Thursday with Chrysler Canada CEO Reid Bigland who did not disclose the size of the investment slated for Windsor. “But I didn’t get the comfort level I was looking for that we were getting the same investment that was planned.”

Dias said Bigland told him that “Marchionne right now is furious,” particularly at Ontario Conservative leader Tim Hudak. Hudak was among the most vocal critics of the Chrysler investment, urging Ontario Premier Kathleen Wynne not to give in to the automaker’s “ransom” demands.

According to Dias, Bigland spoke by phone to Hudak on Wednesday afternoon and “tore a strip off him.”

“If Hudak was calling to request absolution, he sure didn’t get it,” said Dias. “Because Reid was quite emphatic that the stupidity of his comments was one of the key reasons that it was not worth it.”

Marchionne, he added, “was frustrated by the pace of the government negotiations, but the Hudak piece was the straw that broke the camel’s back.”

Bigland blasted Hudak “for dragging the company’s name through the mud. It’s about a company that has two assembly plants in Canada, and he’s screwing with its reputation.”

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